Data Entry: Net Worth
Congratulations! You're making fantastic progress.
This step, Step 4: Net Worth, is where all the fun happens. Here you will learn how to link bank accounts, investment accounts, and other client assets. Taken together, the items added here will populate the left-hand menu in the Client's Profile.
For a brief overview of entering net worth into a financial plan watch this short video.
Enter bank accounts manually using the Add Account button.
Select the type of account and indicate the balance. This will be a static number — only linked accounts have the ability to remain up-to-date.
Seamlessly up to date
If you are a Premium or Platinum subscriber, you or your clients can use the Yodlee aggregation to link bank accounts and credit cards.
Enter credit cards manually using the Add Account button.
To reflect clients paying off their credit card each month, select Pay in full on the Monthly payment amount. Take full advantage of up-to-date information by linking credit card accounts.
There are 3 ways to enter investment account information:
Integrate outside accounts through an integration partner to link clients' investment accounts. Click +Link Account, click Integration, and select the name of the integration partner to bring up the interface to link accounts.
Premium or Platinum subscribers can use the Yodlee aggregation (either the advisor or the client) to link their investment accounts by clicking the green +Link Account button.
Enter account information manually by using the Add Account button to enter an Investment account.
Use the 'Account type' drop-down box to choose the type of account.
There are two ways of indicating the account’s allocation.
- Use Add Holding to enter in specific tickers for stocks or mutual funds — in which case Morningstar data will be used to update price information on a daily basis.
- Use Add Asset Class to provide a broad allocation mix — either Equity/Fixed Income or broken out using Morningstar asset classes.
If our integration partner or the account aggregation process is unable to provide specifics on the details of one or more investments in an account, you may see them listed as 'Unknown Fund' or 'Unknown Equity'. To specify the asset class(es) for these investments, click on the line for the unknown item and click the 'Asset Classification' button.
If you are a Premium or Platinum subscriber, you or your clients can use the Yodlee aggregation to link their loans.
Use Add Account to manually add mortgages, home equity, car, or student loans.
For more information on how to enter specific loans, see the Loan Details page.
Click on Property in the left-hand column to enter information about the Primary Home. Indicate whether the primary home is rented or owned using the drop-down and provide the relevant information.
Use Add Account > Property to add additional properties - either an Investment Property or Vacation Home.
Selling an investment property
RightCapital allows you to model the financial impact of selling an investment at a future date. Simply use the drop-down menu next to Year of Sale to indicate when the investment may be sold.
The net sale proceeds are calculated as the sale price minus any outstanding loan balance and any expenses. Net proceeds will be included in that year's cash flow. If the client setting uses Traditional Cash Flow, any positive cash flow generated will be invested in the taxable account based on the current or proposed asset allocation.
Taxes -- RightCapital executes very comprehensive tax calculations related to investment properties. This includes schedule E, passive loss limitation, at risk limitation, Sale of Business Property as well as Schedule D 1250 Gain calculations.
Enter Group Insurance information for the client and co-client by clicking on the Insurance bar on the left.
Additional insurance types can be added using Add Account > Insurance, including cash value policies and long-term care policies. See additional information on entering Insurance policies.
To add a business as an asset, or other unclassified assets, click Add Account and select Other:
Lifestyle - Use this to include the current value of various tangible assets in the client's Net Worth such as a car or jewelry.
Note receivable - if clients have loaned money and are receiving payments, use the Note Receivable option to reflect income received from those payments.
Businesses - input information about various types of businesses - LLC, Partnership, S Corp, or C Corp. This page has additional details on how to input business information.
Add even more assets
RightCapital is a powerful tool which empowers you to do financial advising, just right. There are many types of assets which may be included in a client's Net Worth. Learn how to add other types of assets here.